| Demand within Brazil property looks set to continue | | | | His predictions echo the Ernst & Young report, |
| for at least the next two decades with the market | | | | Sustainable Brazil - Housing Market Potential, which |
| offering some of the best investment opportunities | | | | describes meeting demand for property in Brazil as a |
| around. But as always, the secret to high returns is | | | | "huge challenge". Statistics in the report point to an |
| choosing the right sector for your investment in | | | | increase of 58% in the number of households in Brazil |
| Brazil. | | | | by 2030. This together with a rapid increase in |
| And all the signs are pointing to the middle and lower | | | | purchasing power leads Ernst & Young to forecast |
| ends of the Brazilian property market as the areas | | | | the construction of 37 million properties in Brazil over |
| where demand is highest and supply lowest. On the | | | | the next two decades. |
| other hand, at the other end of the spectrum, the | | | | A huge slice of these homes will be built for Brazil's |
| luxury property market is clearly showing signs of | | | | fast-emerging middle classes, indicating that this |
| strain. | | | | sector is the one with the biggest investment |
| Over the last two years, investor focus - both | | | | potential. |
| Brazilian and foreign - has been firmly on the high-end | | | | Meanwhile, the Brazilian government is focusing on |
| of the Brazil real estate market. Properties priced | | | | meeting some of the demand. The state housing |
| over R$700,000 (315,000) have seen spectacular | | | | programme, Minha Casa Minha Vida aims to build 3 |
| rise prices, particularly in Rio de Janeiro and Sao Paulo, | | | | million homes by the end of 2014 through |
| prompting speculation that the luxury property | | | | heavily-subsidised loans. But it's more than obvious |
| market is about to peak. | | | | that Minha Casa Minha Vida will only go part of the |
| But while the top end of property investment may | | | | way to help reduce demand. |
| well be in danger of collapse, other market sectors | | | | Buyers in the middle and lower sectors of the Brazil |
| are showing quite the opposite. | | | | property market tend to have a bigger stake in their |
| Prices have also risen in the middle and lower ends of | | | | homes than those in more developed markets. |
| the property market and construction continues | | | | Brazilians buying off-plan typically pay 25% to 30% |
| apace, but demand still has a very long way to go | | | | of the property price in monthly installments over the |
| before it comes close to meeting supply. Wilson | | | | construction period. As a result, buyers are much |
| Amaral, Chief Executive of Gafisa, one of Brazil's | | | | more price sensitive and house prices in this sector |
| largest real estate companies, claims that Brazil needs | | | | of the market tend to experience a slow but steady |
| to build 1.6 million new properties every year just to | | | | rise unlike the steep price hikes seen in luxury |
| satisfy demand from families entering the market. | | | | property. |
| And all this without even addressing Brazil's massive | | | | So, while speculation in the high-end property market |
| shortage of homes, currently estimated at around 7 | | | | in Brazil's big cities is expected to lead to the market |
| million. | | | | peaking in the very near future, the very opposite is |
| Quoted in the business broadsheet, Valor Economico, | | | | true for the middle and lower sectors. Here, the |
| Mr Amaral said that "if Brazil goes on growing at 5% | | | | combination of relentless demand - that's unlikely to |
| to 6% a year, with salaries rising above inflation and | | | | be met for at least 20 years - and buyer profile |
| young people entering the job market, demand will | | | | means there's scope for successful investment in |
| go on rising at current levels for the next 20 years". | | | | property for many years to come. |